Reclaiming Common Sense

The CES worker Data is Projecting a Reported Gain

The CPS Jobs Data is Projecting

The monthly employment Situation Report, or Jobs Report, is created using two data sets: The CPS (Current Population Survey) Jobs and Unemployment Data and the CES (Current Employment Statistics) Workers and Wage data. They have been out of sync this year with some months having strong CPS data and weak CES data or strong CES data and weak CPS data. Each data set has a seasonally adjusted (SA) component and a non-seasonally adjusted (NSA) component. The values reported are the SA data.The recorded values are the NSA data. What should be recorded and what should be reported this December?

We have record worker losses 16 of the past 19 Decembers. The headline number is the Seasonally Adjusted Non-farm Payroll nor number. umber. The Obama administration streak is/was the Seasonally Adjusted Private Sector Worker number. This column has written numerous articles how the "streak" is an economic urban legend created by changing seasonal factors and revisions. We should anticipate the creation, or loss, of up to 100,000 NSA CES private Sector workers this December. The odds are for a slight decline in the 50,000 to 100,000 range.

We should record month to month growth in Manufacturing, Trade Transportation and Utilities (TTU,) and Financial Services (FIRE.) We should also record net job losses in Professional Business Services (PBS,) Construction, and Government. The non-seasonally adjusted gains in Manufacturing will place us near a level not seen since the Great Recession.

We should see growth in all sectors reported. The largest annual growth could be in Mining and Logging (M/L) with up to 8% growth. We should also see 3-5% growth in Construction, and 1-3% growth in Manufacturing and FIRE. We could see 0.5% to 2.0% growth in Manufacturing. NSA Manufacturing jobs tend to peak during December and drop during January. Government should record the smallest NSA Annual gain from December of last year, growing only 0.4% to 0.8%

We have reported the addition of Seasonally Adjusted Private Sector Workers 15 of the past 19 years.  We have added between 90,000 and 255,000 SA CES Private Sector Workers since 2010.  Down can be reported as up. It all depends upon the seasonal factor used. Last month the creation of 504,000 NSA CES workers was reported as the gain of 254,000 SA CES Private Sector workers.  We recorded a loss of 71,000 workers during December 2016 and reported a gain of 191,000 workers. We lost 117,000 NSA CES workers during December 2017 and reported a gain of 167,000 workers. We could record the addition of zero workers and report a gain of over 300,000 workers this December. Watch the seasonal factor, as shown in the combination and permutation table. A low seasonal factor will lower the seasonally adjusted worker number. A higher seasonal factor will boost the number.

All sectors should report gains this month. The largest month to month gains should be reported in Leisure and Hospitality (LAH,) Education and Health Services (EHS,) Professional and Business Services (PBS,) and Manufacturing. The quest is whether or not Information (IT) gains or Other Services (OS) gains will be reported.

All sectors should report December to December Gains. We could see the largest growth in M/L, as is thought for the NSA data. Other sectors expecting SA Growth over 2% are Construction, PBS, EHS, LAH and Manufacturing

Watch the revisions to the prior data.  We had a huge spike in NSA CES workers last month even after the October data was revised higher from ots advance value. If the November data is revised higher by 50,000 workers then the December data will effectively be lowered by 50,000 workers, from 179,000 to 235,000 workers to 129,000 to 185,000 workers.  The data could even be higher than 235,000 after the revisions because they know that they will be revising the 2019 data down by 501,000 with the release of the January Employment Situation Report.  This was disclosed this past August.

The Current Population Survey Jobs Data indicates that we will report net job losses during December. The last time that there were net NSA CPS job gains was during 2006. We can expect 500,000 to 600,000 NSA CPS jobs lost.

The CPS data also indicates that we should report net job gains. Once again, this is similar to the CES private sector worker data. What is recorded as down will be reported as up. We have reported December net job gains since 2010. This may bolster the participation rate.

We most likely will report and record a drop in unemployment. The CPS U-3 unemployment data is very different from the weekly Continuing Claims data. The U-3 data includes people who are out of work who are looking for work. The continuing unemployment claims data includes only people who are out of work, who had unemployment benefits with their prior jobs, who are currently looking for work. We saw increases in December unemployment claims recorded and reported during 2016 and 2018. If this happens then we should see a pop in participation reported. If we see a drop unemployment reported and recorded then the participation rate could stay the same or drop slightly. 

Watch the multiple job worker data. There are some liberal talking points that say that the economy is so bad that we have record or near record levels of people needing to work multiple jobs. Some are confused and think that multiple job workers (MJH) are causing the participation rate to stay low. Multiple job workers are a subset of the CPS data. These full-time jobs and part-time jobs are already used in the calculation of the participation rate.

The total number of Multiple job workers should rise month to month and December to December. Last December we had 8.030 million MJH. Last month we had 8.279 million MJH. The December Record is just 8.220 million. We should set a December record for MJH. Last month we had 4.601 million people working one full-time job and a secondary Part-time Job (FT PT.) The all-time record for December is just 4.574 million. We could go either way month to month. We shuld be up December to December. We should set a record for the number of people working two PT jobs (PT PT.) Last month we had 2.16t Million PT PT. Last December we had a December record of 2.177 million PT PT workers. We should grow month to month and December to December, setting another record for the month of December.

There are other ways to examine the data. How are men and women doing in the Trump Economy? Will women set another all-time record for total jobs this December? They are almost guaranteed to set a December Record. Men will probably see their level of FT jobs drop and PT jobs grow. This will be covered in the Men and Women and Multiple Jobs article. How is President Trump doing compared to former Presidents Reagan, Clinton, George W Bush and Obama? This will be covered in the "Five Presidents at 35 months" article. (Hint: His only competition for job creation is Bill Clinton.) What is happening with regard to wages and workers? This will be covered in the "Wages and Workers" article.

Expect to record worker and job losses recorded and gains in workers and jobs reported. Expect minor changes in the Unemployment level to be recorded and reported.  Unemployment should fall. Expect a seasonally adjusted private sector number around 207,000 prior to revisions to the October and November data to deflate this number. We should see December Wage Records. We should see multiple December Multiple Job Worker records.

It's the Economy.